Keratin is an important bioresource primarily found in feathers, hair, wool, nails, claws, hooves, horns, and beaks. These crucial protein sources are utilized in many ways for diverse applications. The peptides of keratin develop hierarchical complexity, which leads to the formation of these recalcitrant biomasses. Therefore, microbial breakdown of keratin is a complex process and involves important proteolytic enzymes and inorganic factors. Disulfide bond reduction is the key step in keratin degradation that is mainly facilitated by disulfide-reducing agents or disulfide reductases. Notably, α- and β-keratinous substrates exhibit different structural features; as a result, their disintegration processes make a diversity among keratinous biomass. Various studies have suggested that pretreatment can improve degradation yield following microbial processes. Keratin hydrolysates have been investigated for various uses that contribute to mitigating the environmental impact of these solid wastes. Furthermore, keratin peptides possess bioactive properties, including antioxidant, cytoprotective, and anticancer effects, making them potential candidates for biomedical and nutritional sectors. Microbial keratinases are known for a wide range of substrate specificity that significantly contributes to areas like prion decontamination, carcass processing, antimicrobial functions, and skin exfoliation. This review aims to examine keratin bioresources, their structure, and microbial mechanisms for keratin degradation, along with current insights and future applications of keratin hydrolysates and keratinases.